Please note: Pursuant to the Corporations and Bankruptcy Legislation Amendment (Extending Temporary Relief for Financially Distressed Businesses and Individuals) Regulations 2020 which commenced on 22 September 2020, the Australian Government has extended the temporary insolvency relief measures (which came into force on 25 March 2020 in response to the coronavirus (COVID-19) pandemic) to 31 December 2020.

WELCOME TO OUR LATEST EDITION OF OUR TRUSTEE QUARTERLY UPDATE!

LEGISLATION

CORPORATE INSOLVENCY AND GOVERNANCE ACT RECEIVES ROYAL ASSENT 

The Corporate Insolvency and Governance Act 2020 received Royal Assent on 25 June 2020. As reported in our last Update, the Act brings in some major changes to the insolvency regime which are potentially relevant to scheme trustees seeking to enforce their rights against sponsoring employers, in particular:  

Section 254 of the ITAA imposes obligations on agents and trustees concerning income, profit or gains of a capital nature.

Application of the section extends to liquidators, receivers and administrators by virtue of the extended definition given to the term "trustee" in section 6(1) of the ITAA.

Section 254 provides that agents and trustees are:

If you are planning a corporate reconstruction, then this Bulletin is relevant to you. This bulletin focuses on the amendments to the Duties Act in relation to the exemption from stamp duty available in relation to a corporate reconstruction.

On 11 April 2012, the State Revenue Legislation Amendment Act 2012 No. 20 (Amending Act) was passed.

The recent case of Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Limited [2012] FCA 363 is a rare example of the Court allowing an adjournment of a winding up application in connection with a tax debt pending an appeal.

Facts

Following the 2011/2012 Federal Budget announcement that directors will be made personally liable for any unpaid superannuation guarantee contributions, Treasury has released the Tax Laws Amendment (2011 Measures No. 7) Bill 2011 (Bill).

The legislation extends the current director penalty regime for unpaid PAYG. Whilst the announcement from Bill Shorten MP on 5 July 2011 highlights the need to prevent companies engaging in phoenix activities, the legislation will have a much broader impact.

Introduction

By unanimous decision in Bruton Holdings Pty Limited (in liquidation) v Commissioner of Taxation1, five members of the High Court have reversed a controversial decision of the Full Federal Court to confirm that the Commissioner of Taxation (Commissioner) cannot ‘leap-frog’ other creditors in a liquidation.2

It has taken 12 months, but new legislative provisions are now in place to deal with the problems for representatives of incapacitated entities arising from Logan J's decision in Deputy Commissioner of Taxation v PM Development Pty Limited [2008] FCA 1,886.

The new provisions go beyond merely addressing the outcome of PM Developments. They also introduce new obligations for representatives of incapacitated entities as well as some concessions and protections.

Financial Assistance (1)

[UPDATE] Which government support schemes are in place? 

The Federal Government has set up a fund of initially EUR 4 billion by establishing financing companies. With the third 3rd COVID-19 Act, which was passed in the National Council on 03 April, the Federal Government is increasing the fund's resources to up to EUR 28 billion.

An additional financial aid package of up to EUR 34 billion shall consist of

Exposure draft legislation has been released which proposes amendments to the GST legislation to make it clear that liquidators and other representatives of incapacitated entities are liable for GST on transactions within the scope of their appointment.

Date of effect

It is proposed that the main operative provisions of the legislation have effect retrospectively from the commencement of the GST Act on 1 July 2000.

Background